Whereas once the interest in nDVR (network DVR) was driven by operational efficiencies like more efficient storage and the potential for reduced customer premise equipment costs, we are beginning to see the beginnings of consumer-led demand for this concept. Because of that, there is also a growing list of consumer-facing benefits that operators can take into consideration when deciding whether the time is right for nDVR in some form.
The evidence that network storage of personal recordings is something you can market as a ‘feature’ has been growing for some time. For example, Telenet made live and recorded content available on any screen starting in February 2013, with Inge Smidts, SVP Residential Marketing, declaring that the Belgian cable operator was the first to respond to the increasingly vocal demand from customers to be able to view their recordings on a tablet or computer.
The Portuguese cable operator NOS (previously called ZON Multimedia) was an nDVR pioneer with its Timewarp service, now covering STB viewing and multiscreen devices. The company credits network DVR with reducing expenditure on CPE and making the service easier to maintain and upgrade, among other supply-side benefits, but it also talks about an important marketing benefit: the ability to record multiple channels simultaneously.
This is also viewed as a major benefit at Swisscom, where one of the main ambitions for nDVR is to overcome the limits that last mile access capacity imposes on how many recordings you can make at the same time.
Peter Fregelius, Strategy & Innovation Head at Swisscom, told Connected TV Summit in June: “80% of our customer base watches recordings from live channels and we want them to be able to record as much as possible. This was limited by bandwidth and that is one of the pain points we are solving by using nPVR.â€
His company provides access to network recordings via the STB and multiscreen devices. The telco stated previously how multiscreen nDVR has helped to increase ARPU by persuading customers to upgrade to a premium package.
In March 2013 Swisscom told Videonet that network DVR was delivering a significant competitive advantage. “The key benefit for our customers compared to competitor solutions is that recordings can be viewed everywhere, and not just in the home,†a spokesman declared.
Daniel Simmons, Director at IHS Technology, the research and consulting company, says the main advantage for operators of launching nDVR, as opposed to DVR, is that it enables customers to access their recorded content on non-STB devices such as smart phones and tablets, inside and outside the home. “This helps create a premium Pay TV service by unifying content availability and the user experience across all devices. Swisscom’s nDVR is a real-world example of this.â€
Stefan De Beule, Director of Multiscreen Sales Engineering EMEA at ARRIS (which provides a comprehensive set of cloud, network and CPE solutions for Pay TV, including whole-home media servers and network DVR) observes that removing DVR recorders from the home is not the key motivation behind nDVR at this stage. In another example of how customer-facing marketing benefits are becoming more important, he says that, on top of the new services enabled by nDVR, operators want a network recording option so they can segment the market more precisely.
Using a home gateway DVR to serve secondary set-top boxes and multiscreen clients in the home is the higher cost CPE proposition. nDVR represents the lower cost option that will tempt people in markets where Pay TV competition, or the presence of a strong free-to-air alternative, limits what an operator can charge, De Beule suggests.
ARRIS is convinced that consumer demand, not just operational benefits, will drive the uptake of nDVR. “Network DVR is becoming compelling for consumers,†declares Mark Johnson, Vice President Sales, Network & Cloud at ARRIS. “It overcomes their frustrations around having to delete content. We are getting a critical mass of multiscreen devices in the market, too, and when it comes to personal recordings it is no longer good enough to limit people to their main screen. I think there is a compelling user demand for this.â€
ARRIS has conducted a lot of consumer research about what consumers want from DVR functionality. In the ARRIS 2014 Consumer Entertainment Index, based on a survey of 10,500 people in 19 markets, 47% of respondents wanted to record two or more programmes at the same time and 30% said they would pay for the privilege. 62% of DVR owners said they have to delete programmes because they have run out of space despite 28% of the recorded content never being watched, and 74% said this caused frustration in the home.
“Not having to remember to record all your favorite shows will certainly be popular among TV viewers,†declares Jason Blackwell at the research firm Strategy Analytics, talking about nDVR.
ARRIS believes Pay TV operators can offer consumers more space as they need it and this could be a source of new revenue. The company also agrees with Daniel Simmons that one of the greatest benefits of nDVR is access to recordings on multiple screens.
While consumer demand for the concept is growing, one of the challenges for nDVR is going to be matching, or coming close, to the consumer expectations set by in-home DVR. However, network recording will mean more flexibility in how services are packaged, presented and priced so there is room for business models where ad-skip is disabled, maybe in return for a cheaper service, as an example. Content rights and advertising relationships will have a major bearing on what the nDVR user experience looks like in every case.
More reading
If you are interested in the drivers for network DVR deployments and in what the nDVR user experience is going to look like, including how the industry will treat ad-skipping, check out our new report: ‘The Winning Formula For Network DVR’ which, like all Videonet content, is totally free.
The Winning Formula For Network DVR
With the emergence of consumer demand for nDVR, driven initially by the need for multiscreen viewing, this report assesses the winning formula for platform operators, covering the user experience (including attitudes to ad-skipping), the role advertising can play in monetizing time-shifting and encouraging rights deals, and how nDVR will fit alongside, or maybe converge with, catch-up TV and TV on-demand.
The report takes a look at the relative roles of DVR and nDVR and their co-existence, the rationale behind current nDVR deployments, content promotion and discovery in an inherently personalized environment, and how to optimize the delivery and economics of nDVR, especially when using adaptive bit rate streaming. It includes insights from Swisscom, NOS, Unitymedia, Decipher, IHS Technology, Strategy Analytics, ARRIS, ThinkAnalytics and Digitalsmiths, among others.
